Despite a directive from the Department of Telecommunications (DoT) urging states to utilize the services of state-owned Bharat Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam (MTNL) for internet, landline, and leased line requirements, State departments largely remain hesitant.
This reluctance stems primarily from perceived shortcomings in network quality and service delivery, rather than a lack of awareness of the DoT’s emphasis on data security and revenue retention for public sector entities.
DoT Secretary Neeraj Mittal has written to Chief Secretaries of all States and Union Territories, requesting them to “consider utilisation of the services of BSNL and MTNL.”
However, a similar mandate from the Centre in 2019, which required all Ministries, public departments, and public sector units to use BSNL and MTNL telecom services, saw virtually no takers.
This persistent avoidance comes despite the significant investment of approximately ₹3.22 lakh crore by the government since 2019, across three revival packages for BSNL and MTNL, primarily aimed at rolling out 4G services. Analysts tracking the sector consistently highlight that private telecom operators, such as Reliance Jio and Bharti Airtel, offer demonstrably superior and more advanced services.
The preference for private providers is evident in multiple instances. In 2018, Indian Railways awarded a tender for 3.78 lakh mobile phone connections to Bharti Airtel, even though BSNL was a contender.
Similarly, in 2023, both Reliance Jio and Airtel won a tender from Indian Railways to provide new mobile connections to 1.1 million employees under a Closed User Group (CUG) scheme, emerging as the lowest bidders. Jio secured 7.28 lakh SIM cards for ₹126 crore, and Airtel 4.85 lakh for ₹84 crore.
An industry veteran in Delhi explained the core issue: “It’s all about better connectivity and backend support that these private telcos have. Whether it is the Railways, Power or the Defence Departments, the private players have much better solutions than BSNL or MTNL.” While acknowledging BSNL’s progress and 5G rollout efforts, the veteran added that “it will take time to adapt by these departments.”
Private telcos also offer advanced and specialized solutions that BSNL and MTNL currently lack. For instance, private players provide Internet of Things (IoT) devices in many states for real-time traffic challans, integrating data on user insurance and pollution certificates. They also power smart meters with intelligent backend devices to monitor and save power, addressing issues like power theft.
“One of the biggest projects of the government – the Central Vista – where the new Parliament stands also has companies like Airtel or Reliance Jio providing connectivity solutions through fiber. Apart from that, they are also part of the Delhi Metro for providing underground infrastructure for communication solutions (fiber),” said an industry source.
Ultimately, State departments prioritize the reliability, advanced features, and robust support systems offered by private telecom providers, which currently outweigh the benefits presented by the DoT’s push for state-owned BSNL and MTNL services.